$1.5 Billion Equity Investment in African Minerals Limited

August 15, 2011

In late July, Cleary Gottlieb represented African Minerals in connection with Shandong Iron & Steel Group’s investment of $1.5 billion in African Minerals’ flagship Tonkolili iron ore project in Sierra Leone. The equity investment will be made in exchange for a 25% interest in the Tonkolili project companies which operate the mine and the related infrastructure. As part of the transaction, Shandong will also purchase iron ore at a discounted price under a life-of-mine off-take arrangement, and will retain the option to buy up to 25% of annual iron ore production from each of Tonkolili’s three production phases based on prevailing benchmark prices. The signing of definitive transaction documents followed an extended period of diligence and negotiation that began in mid-2010. Completion of the investment is subject to various conditions, including PRC approvals, and is expected to close by the end of the year.

The Tonkolili project is a multi-billion dollar mining project to develop one of the world’s largest deposits of magnetite iron ore. The project employs over 5,000 people in Sierra Leone, and will be the country’s single most important source of revenue. The first commercial ore shipments are expected during the last quarter of 2011.